SPY Trends and Influencers November 16, 2019

Last week’s review of the macro market indicators saw moving into November options expiration, that the bull market was back on in force, with the small caps on the edge of joining the party. Elsewhere looked for Gold ($GLD) to continue in its short term downtrend while Crude Oil ($USO) consolidated. The US Dollar Index ($DXY) was drifting to the upside while US Treasuries ($TLT) continued to move lower.

The Shanghai Composite ($ASHR) looked to continue to hold tight around 3000 while Emerging Markets ($EEM) paused in their uptrend.  Volatility ($VXXB) looked to remain very low keeping the bias to upside for the equity index ETF’s $SPY, $IWM and $QQQ. The SPY and QQQ had broken out and were renewing the bull market while the IWM was on the cusp of a break out that could attract more buyers.

The week played out with Gold finding support and then reversing to the upside while Crude Oil continued to mark time moving sideways. The US Dollar met resistance and pulled back late in the week while Treasuries found support early and moved higher all week. The Shanghai Composite started lower and then held as it retested the October lows while Emerging Markets turned from a pause to a pullback.

Volatility remained virtually non-existent, giving equities a wind at their back. The Equity Index ETF’s had little response at the start of the week and then started moving higher at the end of it. The IWM continued to be the exception, a dead weight not moving for yet another week. But this resulted in the SPY and QQQ running to new all-time highs. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at an all-time high. Monday it held in an inside day and then started higher again Tuesday. That continued the rest of the week as it printed 4 new all-time high closes in a row, Friday accelerating the move. The daily chart shows the Bollinger Bands® continuing to point higher with the MACD leveling. The RSI is now into overbought territory, but not extreme.

The target of 333 remains above with 350 beyond that. The weekly chart shows the Bollinger Bands opening to allow a move higher with the RSI bullish and rising. The MACD is turning back up and positive as it moves higher. There is no resistance higher. Support lower comes at 310 and 308.25 then 307.50 and 306.25 before 304.80 and 303.50. Uptrend.

SPY Weekly, $SPY

With November options expiration in the books equity markets are surging. Elsewhere look for Gold to drift lower in consolidation while Crude Oil marks time moving sideways. The US Dollar Index is drifting to the upside while US Treasuries bounce in their pullback. The Shanghai Composite looks to drift down in consolidation while Emerging Markets remain in broad consolidation.

Volatility continues to remain very low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ look to continue the march higher while the IWM continues to churn in a wide consolidation at long term resistance. Use this information as you prepare for the coming week and trad’em well.

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